First Data Drops on Lower-Than-Expected Earnings, Reduced Guidance

Electronic payment services and processing firm First Data Corp. (FDC) declined more than 10% Monday, Oct. 29, after the company's third-quarter earnings came in below forecasts, and the company lowered expectations for adjusted earnings through the remainder of the year.

The Atlanta-based company, which handles some 45% of all U.S. credit and debit transactions, including prepaid gift card processing for many American brands, reported that net income for the three-month period ended Sept. 30, rose 35% to $401 million, or 42 cents a share, up from $296 million, or 31 cents a share, a year earlier. Analysts had called for earnings of 36 cents a share.

Revenue fell 23% to $2.37 billion vs. the $2.2 billion expected by eight analysts surveyed by Zacks. Revenue from the year-earlier period was $3.1 billion.

First Data lowered expectations for adjusted earnings, and now expects between $1.38 and $1.40 a share due to "the negative impacts associated with certain significant and recent foreign currency movements, and a modest dilutive impact from recently closed divestitures."

The company had previously said it expected adjusted earnings to be between $1.42 and $1.47 a share for 2018. It also said it now expects segment revenue on a constant currency basis to increase between 6.3% and 7.3% for 2018, lower than the 7% to 8% increase previously anticipated.

Shares of First Data were trading at $18.96 on the New York Stock Exchange, down a little more than 12%. First Data shares have increased 29% since the beginning of the year. The stock has risen 14% in the past 12 months.

China's economy slowed to its weakest growth rate since 1990, official data confirmed Monday, as a damaging trade war with the United States, and efforts to curb domestic pollution and reckless lending, took a major bite out of the world's second largest economy.